Tech Today: Broadcom Counters, Dumping Match, Liking Fiber Optics

Shares of Qualcomm (QCOM) are down $1.30, or 2%, at $62.69, after Broadcom (AVGO) this morning cut the cash component of its hostile bid for the company by $3 per share, to $57, scolding the company for its increased bid for NXP Semiconductors (NXPI).

Among reactions, Stacy Rasgon of Bernstein, a bull on Broadcom, thinks the company is feeling “emboldened” at having gotten a partial endorsement from Institutional Shareholder Services over the weekend, and he writes "this is apparently going to go down to the wire."

Rasgon writes that he won’t call the vote, “but suspect it will be close,” meaning the pending vote on Broadcom’s six nominees for Qualcomm’s board, which takes place March 6th at Qualcomm’s annual meeting.

Breaking up with Match

Shares of online dating empire Match Group (MTCH) are up 11 cents at $42.21, despite a note from J.P. Morgan’s Doug Anmuth this morning cutting his rating on the shares to Neutral from Overweight, after concluding that the business is still “well positioned longer term,” but that the valuation has become too rich (he has a $42 price target.)

“With MTCH shares at all-time highs, up 34% YTD and 168% since late July 2016 (vs. the S&P 500 up 2% & 25%), we believe MTCH’s current share price reflects a more balanced risk/reward profile,” writes Anmuth.

Warming to Palo Alto

Shares of security technology vendor Palo Alto Networks (PANW) are up $4.39, or 2.7%, at $167.31, after Susquehanna’s Anne Meisner this morning raised her rating on the shares to “Positive” from Neutral, with a $195 price target, up from $150, after concluding the company will have a “solid” report when it discloses earnings on Monday, February 26th. She also thinks the company’s overall revenue growth is set to become more “stable” as it puts behind it the “deceleration” of its “next-generation firewall” appliance.

Good day for price target increases

Shares of cloud darling Salesforce (CRM) are up 47 cents, or half a percent, at $114.82, after JMP Securities’s Patrick Walravens this morning reiterated an Outperform rating, and raised his price target to $125 from $115, based on “checks” that he says have been “unusually strong” in advance of the company’s earnings report on February 28th, according to a summary of the report provided by TheFlyontheWall.

And cloud-based life sciences software maker Veeva Systems (VEEV) is up up 89 cents, or 1.5%, at $61.24, after Morgan Stanley’s Stan Zlotsky reiterated an Overweight rating on the stock, and a $72 price target, writing that his “checks” suggest its next fiscal year will be a “story of two engines,” those being free cash flow generation and its newer “Vault” product.

Shares of payments pioneer Square (SQ) are up 44 cents, or 1%, at $45.37, after KeyBanc’s Josh Beck this morning reiterated an Overweight rating on the shares, and raises his price target to $52 from $40, citing several factors that could boost its Ebitda next year to over $600 million, versus what he’s been estimating at $435 million, including various “up-market and expansion” opportunities.

Shares of Netflix (NFLX) are up $5.37, or 2%, at $283.92, after Piper Jaffray’s Michael Olson this morning reiterated an Overweight rating, and raises his price target to $319 from $281, after surveying over 700 subscribers of the streaming service in Mexico, German, Spain, Brazil, the U.K., France and Australia, and found that the number of people who would drop their subscriptions if prices were to rise by 20% declined by 15% — an improvement — versus the survey conducted in June of last year.

Olson concludes the improvement means if Netflix were to raise prices by 20%, it could boost his 2020 earnings by $1 per share, to $7.40.

Both Amazon (AMZN) and Alphabet (GOOGL) are marching higher after MKM Partners’s Rob Sanderson raised his price targets on them, boosting Amazon to $1,750 from $1,350, and boosting Alphabet to $1,355 from $1,210. Sanderson now models higher revenue growth for each, and rising margins for Amazon.

Amazon is up $25.40, or 1.7%, at $1,493.75, while Alphabet is up $18.85, or 1.7%, at $1,122.44.

Liking fiber

Shares of fiber-optic component maker Acacia Communications (ACIA) are up 30 cents, or 0.7%, at $42.22, after Cowen & Co.’s Paul Silverstein this morning pounded the table for the stock — based on what may be a bad earnings report when the company comes out with numbers tomorrow afternoon, after the closing bell.

Silverstein thinks it will be a “weak” Q4 and outlook, “but we believe most of the investment community does too,” he writes, meaning that this is the bottom for expectations. “We would buy/add now,” he advises.

Silverstein also endorses another fiber name, Inphi (IPHI), which he notes is down more than 30% since January 2nd. There’s still a compelling long-term outlook” for the company’s “operating model and shares,” he writes.

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